The Hidden Cost of Faxing in Healthcare
What if it took 3 months to get an appointment with your dry cleaner? Or your bank needed to be financially incentivized to digitize your account records? What if your car salesman only communicated via fax? In some industries, poor customer experiences like the above would result in a loss of business. But healthcare has largely managed to avoid the kind of disruption we’ve seen in other industries that are facing outside pressure to undergo digital transformation. In a lot of ways, it all comes down to the fax machine.
To fax or not to fax
The fax machine straddles two generations of technology—the analog and the digital. Like cassette tapes, calculator watches, and Polaroids, it’s reminiscent of technology that’s long since fallen into disuse. For healthcare providers, the fax machine isn’t an ironic novelty item from the 80’s, it’s a critically important piece of technology.
Today, 75% of U.S. medical communications depend on the fax machine. Just as this old school technology sits in the middle of the evolution between email and the rotary phone, so too do the technology capabilities of many healthcare organizations.
A Brief History of the Electronic Health Record (EHR)
Back in 2009, the Obama administration attempted to kill the fax machine with its HITECH Act. The American government paid around $30 Billion to hospitals and doctors to incentivize the move from paper to digital records. It worked. 95% of hospitals and 90% of physicians now use Electronic Health Records (EHR)—a digitized paper trail of your health history.
With digitized health records that could be easily emailed or sourced from an online portal, one would assume fax machines might go the way of the floppy disk. However, that’s not been the case. Faxing is so persistent that nearly 15 billion faxes are sent per year by healthcare professionals.
Faxes are not only clunky in an old-timey technology way, but they’re also expensive. Just looking at prior authorizations alone, providers would save $3.20 per transaction. With the average provider submitting 50 to 60 prior authorizations a day, 90% of which occur over fax or phone, the costs are astronomical. When including the hidden costs of faxing—lost patient, document storage, unreadable printouts, wrong fax numbers, paper and ink—faxing likely costs the industry billions of dollars a year. In an already expensive healthcare environment, how can anybody afford to rely on paper and fax?
Interoperability has arrived
A combination of past government regulation and expert labor have sheltered healthcare in what are increasingly turbulent times. Several factors are now collapsing the old paradigm: expectations around patient experience; push for value-based care; pressure from Big Tech; public demand for reduced cost; shifts in regulation; and cost-effective edge technologies like artificial intelligence.
While all of these will contribute to a long-anticipated disruption in healthcare, the fax era will likely come to a close because of developments in interoperability.
One of the core arguments of those who defend the use of fax machines in healthcare is the lack of interoperability—i.e. ability to share digital health records across health systems, platforms, devices—which results in providers resorting to the use of the fax machine. Those walls are rapidly coming down.
Changes spurred by government regulation, such as the Cures Act, MACRA, Meaningful Use, MyHealthEData Iniative, are making it difficult to keep faxing documents. Healthcare providers that continue to rely on the fax as an information-sharing crutch will not only run afoul of rules and bylaws but will also lose patients. Not to mention there’s a whole generation of doctors out there who have never seen a fax machine before.
While there will continue to be resistance to sharing data, especially among competing health systems, as patient data becomes increasingly tied to health outcomes, providers and payers will have no choice but to recycle their fax machines.
To learn more about the potential of interoperability, check out our post on solving fragmented care.